New report from FarEye addresses key last-mile market trends

A report issued today by Chicago-based FarEye, a global last-mile AI-powered software platform, focuses on takeaways related to consumer delivery expectations, cost-to-serve pressures, and AI adoption, and other last-mile topics.

Entitled “Eye on the Last Mile,” the report is based on feedback from more than 200 United States-based supply chain and logistics leaders. The report was released in conjunction with its Last Mile Leaders conference, taking place in Chicago today and tomorrow.  

One of the key findings in the report observed how same-day delivery is expected to grow from 27% of deliveries today to 35% by 2027, which FarEye said signifies acceleration toward ultra-fast fulfillment.

FarEye CEO and Co-Founder Kushal Nahata told LM that this serves as evidence that the need for speed is real, adding that while speed is a competitive differentiator today, it is soon changing into a basic expectation.

“This could also stem from their perception of how month-on-month volumes are changing and how consumer expectations are evolving,” said Nahata. “Same-day will soon be mainstream, and that is a natural evolution of online buying behavior globally.” 

Not surprisingly, the report explained that cost control remains a significant priority for 50% of the report’s respondents, with FarEye citing things such as ongoing pressures from fuel, labor, and operational expenses.

When asked about some of the key ways for shippers to deal with cost control in the last-mile market, Nahata said that with fuel being a significant driver of cost, switching to EVs can be one of the most basic things to do. However, he added, it also depends on the area and range of deliveries, and the availability of charging station infrastructure.

“Apart from that, routing inefficiencies are stated as another major driver,” said Nahata. “Investing in AI-based route optimization can be another solution. For deliveries executed by carriers, rate-based carrier selection, AI-based data-driven carrier management are some strategies shippers need to adopt.” 

To that end, he noted that he thinks there is a 100% chance that the last-mile market sees the usage of real-time visibility tools and AI-driven offerings to see material upticks in last-mile operations.

“AI going mainstream is a key trend in 2025,” said Nahata. “Hence, we will see the evolution and adoption of real-time visibility tools, especially ones powered by AI.” 

From a pricing perspective, the report noted that U.S. delivery costs from 2024 to 2025 showed significant variation, with an overall average increase of around 12%, with more than half of deliveries seeing moderate price growth from 0%-to-15% that reflects typical annual rate adjustments. And it added that some routes or service types rose by 20%-to-30% or higher, with some rising up by as much as 74%. It noted that this could be linked to special surcharges, rural delivery costs, or revised service agreements—and also shows what the report called clear clusters at 0%, 10%, and 25%, serving as a suggestion that many price changes follow standardized tiered adjustments instead of being set individually.

As for ways in which shippers can manage these shifts in last-mile pricing, Nahata said these
shifts are also geography-specific, adding that leveraging rate-based carrier selection and avoiding ad-hoc selection can help address this. 

Other key takeaways cited in the FarEye report include:

• the biggest U.S. last-mile challenges, in order, were cost, visibility, carrier performance, flexibility, demand forecasting, scalability, driver management, and sustainability;
• 61% of consumers are willing to pay more for faster delivery options, but operational gaps exist, with 58% of businesses not offering delivery slot selection;
• 70% of U.S. last-mile leaders are targeting 99%-plus on-time damage-free delivery; and
• almost 90% of companies plan to maintain or increase outsourcing by 2030, driven by the need for flexibility, scalability, and capacity gains in a competitive market

Please click here to read the complete report.